The undead banks

Olli Rehn, Member of the European Commission in charge of Economic and Monetary Affairs

Olli Rehn, Member of the European Commission in charge of Economic and Monetary Affairs

History has proved that ideology and logic (science) are in direct conflict. If you want to serve them both the outcome is usually a monster or a statement of the obvious. Take for example the soviet science, full of proletarian ideology at its apex during the Stalinist period. Its most cherished achievement was the experiments with Pavlov’s dog! It took Pavlov a number of years to prove that whenever a dog is hungry, its saliva producing mouth glands are working full speed in the prospect of food. It was a real triumph of the Stalinist science! Adieu logic!

The same line of soviet thinking (ideology comes first), is nowadays applied by the European Commission over the issue of banks’ recapitalisation. Like the hungry Pavlov’s dog, whenever a bankrupt bank expects new capital, its management becomes anxious and pays very little attention to anythingw else, like the source of the new finance.

What matters most is the money! No? As long as it is euros, bankers don’t care if they come from taxpayers or the devil.It is interesting however in this case to watch the attitude of the Commission, the provider.As it is evident almost all Commissioners are ideologically in favour of the private sector, bankrupt or not. Even in the case of bankers, who have driven their business down the cliff, the Commission wants them to continue running the business, no matter if the banks are being recapitalised with taxpayers’ money and thus, logically and “scientifically”, have to be transferred to the state sector.

But no, this is not the case and the banks are still under their old and unsuccessful management, because the Commission chooses to serve its ideology rather than logic. Here comes the Italian writer Carlo Goldoni, to explain things with his classical comedy, “servant of two masters”.

As Goldoni says, at the end you betray both of them. In this case though, the Commission chooses clearly to abandon logic and serve its liberal ideology. Logic and science are thrown to the dustbin and the EU serves its private masters, forgetting however that the core idea of this philosophy wants the bankrupt businesses to die and not be saved by the state! Alas nothing is any more like the good old days!

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